City Council Gives Preliminary Approval to Agreement for Funding from Non-Profits

The Pittsburgh City Council is on path to reach another multi-year agreement with the city's largest non-profits to provide payments in lieu of taxes. Council gave preliminary approval Wednesday to a measure that would authorize the city to enter into an agreement with the Pittsburgh Foundation, which will collect and manage the payments.

The fund will be filled through voluntary commitments from area non-profits to provide financial assistance to the city for 2012 and 2013, but members who voted in favor were not happy to be doing so. Some of the biggest non-profits in the region, such as the University of Pittsburgh and UPMC, were called out for not giving their fair share.

"The idea that they have not voluntarily stepped up to the plate to give the city of Pittsburgh somewhere in the range of $15 to $20 million is a public disgrace, that we're not getting significant money voluntarily from these non-profits," said Councilman Ricky Burgess, who heads the Finance and Law Committee.

Some of the large entities counter they do make contributions to the city in the form of free medical care for those in need and contributions to the Pittsburgh Promise, among other things, but Burgess said it's not enough. He pointed to other cities with large universities, such as Harvard and M.I.T., and what they contribute to Cambridge, Massachusetts, or what Brown University contributes to Providence, Rhode Island. He said the same could be done here.

"The universities and the large non-profits could voluntarily, without any act of the state, give up $15 to $20 million without raising tuition, without affecting their overall profitability. The question is not should they do it — of course they should — but they will not," said Burgess.

Burgess went on to call the voluntary agreement in place a sham agreement.

The council agreed that something more permanent needs to happen to force non-profits to give more. For now, members approved the agreement because they said something is better than nothing.

"This same discussion occurred in 2008 and at that point we could not come to an agreement on city council and we received zero. I mean they called our bluff at that particular point in time and we received nothing for those two years," said Scott Kunka, city finance director.

City Council President Darlene Harris and Councilman Burgess said they have been meeting with attorneys and others to form a more permanent solution to this issue. Councilwoman Natalia Rudiak said something she'd like to see is a breakdown of how the non-profits benefit from the city.

"I'd like a commitment for our city to do an analysis of the city services and public services we provide to these institutions and non-profits," she said.

Rudiak and several other councilmembers said they hope going forward to continue the conversation, rather than revisiting it every so often, when the voluntary agreement is up for a vote.